Welcome to the Boozt Q3 2024 Report Presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers, participants are able to ask questions by dialing pound key five` on their telephone keypad. Now I will hand the conference over to CEO Hermann Haraldsson and CFO Sandra Gadd. Please go ahead.
Thank you, and good morning all, and welcome to our Q3 2024 Financial Presentation. Let's go to the first slide, our highlights. The market trends observed in the first half of the year have, as expected, continued into the second half, where consumers are conscientious as well as holding back. That said, revenue growth in the Q3 was 6%, and excluding currency effects, growth was 3% higher at 9%, and in line with what we delivered in the first six months of 2024. The quarter was quite bumpy with regards to consumer demand, especially August, which was impacted by the very warm weather. September compensated somewhat for a poor August, with a return to double-digit growth.
Even though we don't like to talk too much about weather, we saw an immediate effect in September when it got colder in the region, and customers started to buy into the autumn-winter collection. Overall, growth was driven by a solid increase in active customers across the region, while average order value was slightly down due to currency, and as in prior quarters, limited access to campaign goods once again had an adverse effect on our growth. Our department store model remains a key selling point, and more than 100,000 new customers are now shopping from more than one category, and to illustrate the importance of the shift, sales to these plus 100,000 customers in the last 12 months has more than tripled compared to when they were buying from only one category. Customer satisfaction remains high, with an NPS of 73 and a Trustpilot score of 4.4.
They remain well above industry average and an important differentiator versus competition. The Adjusted EBIT margin was 3.3%, down from 4.3% in Q3 last year. First of all, FX had a negative impact on the margin of around one percentage point in the quarter. Underlying there are, of course, other moving parts, but in theory, our margin would have been unchanged, assuming constant currency. Sandra will go through the different building blocks later in the presentation, but I would like to highlight one thing. During the quarter, we have introduced more competitive prices on Booztlet. This has been done to clear some of the older products from prior seasons to keep our inventory fresh. As you know, the most important thing for us is always to make sure that we do not carry old stock forward.
Booztlet now has the size to be able to handle excess stock, which has always been our ambition. So basically, the intention with Booztlet was always to be able to hedge our inventory risk when doing the upfront buying for Boozt.com. This has come into play during the quarter as consumers' sentiment has not come back to positive territory as we had expected. The additional markdowns are temporary and something that we're able to do without compromising the Boozt.com brand due to Booztlet being a separate sales channel. We also do this to some degree in Q4. In the quarter, we continued our share buyback program. So far this year, we have repurchased shares equal to almost 1.5% of the share capital.
Despite this and the fact that we have increased our inventories ahead of the holiday season, we still ended the quarter with a cash position of SEK 641 million. Based on the performance so far in the year, we maintain our guidance, which I will come back to later in the presentation. Last but not least, we were notified yesterday that the High Court in Norway has rejected the appeal from the Norwegian tax authorities, and we have now officially won the case we had with the authorities. This means that we can now apply for a simplified registration in Norway, which in turn means that we will not be paying import duties in Norway looking ahead.
This is great news, not least because we will save some SEK 50 million in duties each year, as this was the customs paid in 2023, but also because we will now allow ourselves to be more active in Norway, giving the improved profitability. It is too early to say exactly how it will impact our business in Norway, both operationally and profitability-wise, but we can say that a fair share of the saved amount will find its way to the bottom line. Now, please turn to the next slide. As in the previous quarter, we had a very solid quarter in terms of new active customers. In the quarter, we welcomed around 250,000 new customers, and in total, the number of active customers during the last 12 months increased by 12%. The growth was 10% for Boozt.com and 17% for Booztlet.com.
In the Nordics, which is where we are most established, the number of active customers in the two shops increased by 7% for Boozt.com and 12% for Booztlet. And in an environment with a quite muted consumer sentiment, it is quite encouraging for us to see that the consumers that are in the market continue to go online and continue to go to our two shops. Active customers increased by more than 40% in the rest of Europe. This was mainly driven by Germany and the Netherlands. These are both markets where we are being a bit opportunistic while keeping focus on being profitable on every order. As I've mentioned on previous calls, we have, for example, introduced return fees in Germany for Boozt.com. Finally, the Baltics continue to perform well, and active customers in the region were up 35% and 49% for the two sides in the quarter.
This is obviously still from low levels, but with a continued high average order value on par with the group, we see decent profitability as well as strong growth opportunities in the Baltics. Let's go to the next slide. As mentioned earlier, we continue to see a healthy increase in the number of customers shopping from more than one product category on Boozt.com. This is one of the most strategically important goals of our department store model, and it's also one that is easily measured in our financial performance. As I have mentioned on more than one occasion, the customers that shop from more than one category, they spend more on our sites, they stay more loyal to our brand, and they return less. In other words, the more categories a customer buys, the higher the customer lifetime value.
In the quarter, and as illustrated in the slide, we saw an increase of between 5% and 15% on all groups of customers shopping from two to six categories on Boozt.com. This amounts to a total of just above 100,000 customers. The share of customers shopping from more than one category is now at 51% for the last 12 months. This is slightly down compared with the previous 12 months, where it was 52%. It is important to note, though, that this is a number which continues to be impacted by the fact that new customers typically shop from one category to begin with, and in the last 12 months, we have gained close to 200,000 new customers on Boozt.com. This is very good. Even though we put a lot of effort into getting our customers to buy into more categories, we still want to increase our customer base.
We know that we're able to make customers come back, and we know that we're able to get them to try new categories, and we believe that when consumers' propensity to spend goes up again, we will be able to get them to use some of their spending on our categories, so please turn to the next slide on our Club Boozt. Before handing over to Sandra for the financials, I would like to give you a few highlights on our members' club, Club Boozt. Club Boozt has now been live for a bit more than a year, and in the quarter, it reached 1.7 million members. This means that more than 50% of our active customers are now club members.
This makes the customers easier to reach and to engage with, and while it is too early to make any solid conclusions, initial data on how our members shop indicated quite encouraging shopping behavior by our Club Boozt members. For starters, even though the customers that joined the club are already some of the better customers, we see that they increased their shopping frequency after joining the club. On average, club members buy from Boozt.com around six times a year compared with around four times before they joined the club. On top of that, initial data shows that average order value for members is roughly 15% higher than for non-members. And finally, we can see that members on average spend roughly twice the amount on our site compared with non-members.
So Club Boozt provides us with more tools in our toolbox, where we can use clever tactics to get them to try our categories, as well as use our markdowns spent more efficiently. So while it's still early days, the club was launched in June last year, I believe that we're off to a really good start, and it is clearly something that will benefit Boozt as we look ahead. So with this, I would like to hand it over to you, Sandra.
Thank you, Hermann. So please turn to the next slide. As we talked about, revenue increased 6% in the quarter, but as Hermann mentioned, FX had a negative impact of 3 percentage points. So underlying, we continued the momentum from the first half, growing top line with 9%. The development through the quarter was mixed, with a decent July followed by a weak August, and finally a solid September, probably driven by the weather shift, which led to a good start for the autumn-winter collection. Growth was driven by an improvement in all markets. Revenue in Sweden continued the solid development from Q2, growing 8% in the quarter, while Denmark grew only 1%, however significantly impacted by currency. Growth in local currency was 4%. The rest of Europe increased 46%.
In the quarter, most categories continued the good development seen in the first half of 2024, with sports and kids being the best performers. Across markets, consumers remain very price-sensitive, and promotional levels are still very high. However, we have decided to be a little bit more aggressive on prices on Booztlet compared with earlier, mainly to clear inventory ahead of the busy season. On the other hand, we have been a bit less promotional on Boozt.com, mainly to protect our margin, which, as I will come back to later, is impacted by currency. For the first nine months of 2024, net revenue growth was 8% or 9% in local currencies. The gross margin was 38.6% in the Q3 and decreased 1.2 percentage points compared to last year.
The decline was driven by the lower level of campaign stock, as well as the just-mentioned decision to lower prices on Booztlet. Finally, currency fluctuations had a negative impact of roughly 0.5 percentage points. The adjusted EBIT margin was 3.3%, down from 4.3%. This was driven mainly by the lower gross margin, as well as a slight increase in the fulfillment cost ratio. Both, of course, impacted by currency in the quarter, and I will come back to the underlying development in a minute. So if we turn to the next slide, please. If we look at the segments, we see that the revenue in the quarter on Boozt.com increased 5% or 8% in local currency. As in the first half, we saw a significant increase in active customers on Boozt, and in the quarter isolated, close to 200,000 new customers shopped on Boozt.
Active customers in the last 12 months increased by 10%, which was a broad-based improvement. Actually, we saw an increase in all active customers in each and every market that we operate in. In the Nordics, revenue on Boozt.com increased with 2%, which was held back by negative growth in Denmark. However, in local currency, revenue from Denmark increased 2%. Growth outside of the Nordics was 52%, driven by Germany and the Netherlands, but we also saw continued good development in the Baltics. The adjusted EBIT margin for Boozt.com decreased with 0.4 percentage points to 3.5%. The decline was mainly related to currency, as the underlying development was encouraging and supported by operational leverage on costs. If we look at Booztlet, revenue increased 13%, in line with the development we saw in the first half of the year. Growth in local currency was 15% in the quarter.
Just as in the first half, growth was held back by a lower level of campaign stock, while the number of new customers fueled growth. The number of active customers on Booztlet was up 17% in the quarter. Revenue from the Nordics increased 9%, while the rest of Europe was up 33%. Growth in all markets was, of course, supported by the previously mentioned price initiatives that we launched on the site. The average order value was down 2% on Booztlet, which was all due to currency. Finally, the adjusted EBIT margin for the quarter was 2.6% compared to 6.3% last year. The decline was mainly due to the temporarily lower prices on the site, as well as the limited access to campaign goods. So if we move on to the next page, we see the development of the cost ratios in the Q3.
Initially, it is worth highlighting that all cost lines in the quarter were impacted by currency. Our operational costs are tilted towards the Swedish krona, where our top line, as you know, is primarily in foreign currencies. Consequently, the operational cost ratios were negatively affected by FX, with around 0.5 percentage points in total. That said, let's go through the different cost lines. So if we start with the fulfillment cost, we continue to see an impact from the installation of transfer cells at our warehouse, and the fulfillment cost ratio in the quarter therefore increased to 11% versus 10.7% in the Q3 last year. The transfer cells are now fully operational, and we expect this to bring material productivity improvements already from Q4. So you should expect to see a lower fulfillment cost ratio in the next quarter.
The marketing cost ratio for the quarter was 10.2% and slightly down compared to last year. While we still experience high competition for cost per click, we continue to gain benefits from a large base of loyal customers, of which many are joining our members' club that Hermann talked about, Club Boozt. The loyal customers tend to come as direct traffic to a higher degree than prior periods, where our new customers are recruited through performance media. The adjusted admin and other cost ratio was 9.9% in the quarter, down from 10.2%. The improvement was driven mostly by leverage on cost. It is worth highlighting that the lower cost ratio was achieved despite last year being positively impacted with roughly 50 basis points related to a reevaluation of accounts payables in foreign currencies.
The non-adjusted admin ratio increased from 11.1% to 11.6%, and this was all driven by an increase in the share-based payments. Finally, the depreciation cost was 4.2% compared to 4.1% last year. So if we move on to the next one, we have an overview of cash-related KPIs for the quarter. Net working capital as a percentage of revenue increased slightly to 13.2% from 12.9%, mainly driven by the higher inventory levels. Inventory as a percentage of revenue increased to 43.2% versus 42.7% last year. This was driven by a decision to build up additional inventory ahead of the busy holiday season, as well as for Q1 next year. We were hugely successful with the decision to increase the inventory ahead of the busy season last year, and also, we found ourselves slightly undersupplied in the Q1 this year, which we tried to avoid for next year.
Free cash flow in the quarter improved to a negative SEK 17 million compared to a negative SEK 94 million last year. The improvement was mainly driven by a more favorable development in operating working capital compared to Q3 2023. For the first nine months of 2024, free cash flow was a negative SEK 612 million compared to a negative SEK 829 million last year. Cash flow from investing activities was SEK 41 million in the quarter versus SEK 33 million last year. The increase is mainly related to the investment in transfer cells at our fulfillment center.
Our net cash position was SEK 237 million at the end of the quarter, down SEK 20 million compared to last year. Our cash position continues to be impacted by our share buyback program, and in the last 12 months, we have repurchased own shares for SEK 147 million. So this ends the financial overview, and back to you, Hermann.
Thank you, Sandra, and going to the outlook for 2024. As mentioned initially, we maintain our guidance for the full year. This means that we aim for revenue growth between 7% and 11% and an adjusted EBIT margin of 5.2% to 5.7%. For the top line, this indicates growth in the Q4 of 6% to 16%. This is a broad span, but given the current consumer sentiment, we believe it makes sense to be cautious and maintain the range. Our best estimate is still the midpoint of 9%. We are quite certain that consumers will come to our store in huge numbers, both for the Black Friday events as well as to buy Christmas presents later in the quarter. November and December are by far the biggest months of the year and close to 30% of our full-year revenue.
If the consumers have been holding back, waiting for Black Friday deals and Christmas for them to spend, or if they will hold back in November and December as before, that will have a significant impact on our final full-year revenue growth numbers for the year. The same goes with the margin. To reach our margin target, we have to deliver a margin of around 8.5% in the last quarter, and this will then be our highest quarterly margin to date. We do expect a tailwind from an increasing top line, as well as the now finalized installment of our transfer cells. Additionally, the currency headwind that we saw in Q3 this year is not expected in the Q4. However, there is a risk that we need to clear excess inventory through increased markdowns if the consumer is holding back, potentially putting pressure on the margin.
Finally, we changed our CapEx guidance to around 225 million SEK from previously 150-250 million SEK. Now, please turn to my next and last slide. It has been some turbulent years for online retail following COVID. After a significant increase in online penetration during the pandemic, we have seen a modest, if any, increase in online penetration. Some have even claimed that what we have seen is the return of the physical store, a kind of a big comeback for the physical store. To be honest, we've been somewhat skeptical of the claim that physical stores are gaining ground at the expense of online. And therefore, in times like these, it can be good to take a step back and look at the bigger picture. We are very pleased to see that we again have a double-digit growth in our active customer base.
The graph shows that despite tough times, we've been able to continuously attract new customers to Boozt.com while successfully retaining most of our loyal customers. Following many years with double-digit growth in active customers, we experienced a slowdown in 2022 and 2023, I guess kind of expected since the surge during COVID. However, since the Q4 last year, we've seen an acceleration of growth.
We believe this is driven by a combination of a gradual increase in the online penetration, but likely also a starting consolidation in the online retail market. The online market has been and still is very fragmented, but difficult times tend to shake the tree and make the stronger market participants even stronger. In the last 12 months, we have increased our active customer base on Boozt.com with 10%, and we find it likely that these trends will continue to drive further increases in our customer base. This concludes our presentation. Operator, please, will you open up for questions? Thank you.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christian Godiksen from SEB. Please go ahead.
Thank you. Thank you. So a couple of questions from my side initially. So first of all, maybe could you comment a bit on the impact of the Norwegian High Court ruling. What are your plans now to reinvest in growth initiatives going forward? That would be the first question. And then maybe on that, could you maybe also just comment on this? We should not expect this to have any impact on your prices, as I assume you have been competitive already. So that was the first question. Then the second question would be on the pricing environment. So have you seen any initiatives from competitors after you're doing these clearance sales in Booztlet? And you also mentioned, Sandra, in your commentary that the promotion level was high.
On the margin part, Hermann, you mentioned that there was a potential risk on the margin side if you needed to do further markdowns to attract customers to buy. Could you please comment on what kind of impact would that have on your guidance ranges? Would that mean you would be we should aim towards the lower end of the guidance range, or would it be if that were to happen, would that mean you would end below the margin guidance range? And then just lastly, if you could comment a bit on the breakdown on the marketing cost, on how much the cost per click has increased. Thank you.
Okay. Thank you, Christian. I tried to remember all the questions. I started with the margin guidance. I think when we started the year, we had a very broad margin guidance, and the reason why was that we were anticipating that the consumers would come back and that we would have an increasing consumer sentiment, a more positive consumer sentiment during the year. Our top line of our revenue guidance was 15%, and of course, we buy into that target. At the same time, we said that if consumers are holding back and we've bought into the target, there is a risk that we will come in at the lower end of our margin guidance, meaning the 5.2%. So this is why we have kind of this still relatively broad range. Also, as we said, November, December is 30% of our sales for the full year.
If consumers are holding back, for some reason, we might need to increase our markdowns to make sure that we don't go out of the year with old stock. We don't expect it, which is why we still kind of keep the range. Of course, there is a risk if consumers are holding very much back at the end of the year that we will come in at the lower end of the range. So far, there's nothing that indicates that that would be the case. For Norway, I'm trying to remember our prices in Norway have been competitive. Otherwise, we will not sell anything. We have taken the hit on the customs that we have paid, and the amount in 2023 was around SEK 50 million. We are not planning to reinvest SEK 50 million in Norway. That would be crazy.
We are expecting large parts of the savings to hit our bottom line as we have been investing in Norway, anticipating that either the customs would be kind of abandoned by the government or that we would win the VOEC case. It just took a bit longer than we expected. Was there a third question? I can't remember that.
Yes.
Oh, yeah. Pricing from.
Pricing environment.
Pricing environment, yes. Booztlet. As you saw, of course, the Booztlet margin went down. Going out of the first half of the year, we just want to make sure that we don't have old stock, which is why we use Booztlet to clear. As I said, we were hoping for our ambitious target was a 50% growth for the full year, which is not realistic, and we are very religious about not having old stock, which is why we basically use Booztlet for clearance. So this is why we've kind of been aggressive on the pricing on Booztlet.
In addition, I just want to the campaign. The access to campaigners have been quite low, so it's also an ability to actually give Booztlet some more attractiveness despite that.
But this was always the plan with Booztlet, that make sure that we would never go out of a season in a year with old stock. So instead of having a huge write-down, we'll just do it as we go.
Yeah, that makes sense. And the two other questions was how competitors had reacted on these initiatives and then also on the marketing cost. That was the last one.
Okay. On Booztlet, there is a price in the market, and it's relatively kind of a competitive market, and this is what it is. On click prices, they are more or less stable. We saw when Temu was very aggressive that click prices went up, but we're not really competing for the same spend, and we see kind of relatively stable click prices, I believe, at the moment. So it's not that marketing costs are going up.
Okay. Okay. Perfect. Thanks a lot.
Okay. Well done, Christian.
The next question comes from Benjamin Wahlstedt from ABG Sundal Collier. Please go ahead.
Hello, guys. So firstly, I would like to ask a bit about last night's announcement regarding Norwegian import duties. When do you expect to see the full impact of these roughly SEK 650 million savings, first of all?
Yeah, well, now we need to get to work and get the registration going. So we expect that we will get it in 2025, not this year, but we will do it as fast as possible. Obviously, it's in our interest to do it, so.
Talking like late 2025 or rather?
No, hopefully not. Hopefully very early, but.
Hopefully early.
Yeah, it's not in our control and that we need to get into the administrative processes, but we will do it as fast as possible, and we hope that it's early 2025, obviously.
All right. Perfect. I was wondering as well about the ongoing work with transfer cells in the warehouse. You comment on large efficiency improvements from these initiatives. I was wondering if you could put a number on that or sort of try to quantify the magnitude of those efficiency improvements.
We actually want to see it before, but we were actually up there yesterday, and everything seems to be working very smoothly. Nothing was stuck. So we have high hopes for it, but we really want to see the efficiency before we put a number on it. But it is the consolidation. It's been a fully manual process, so we will decrease the number of manual hours significantly. So it should have impact.
But no number yet.
No number. [crosstalk] Okay. Let me ask the question in a different way then. The midpoint of your full year guidance implies a Q4 adjusted EBIT margin of some 8.9%. That's a bit more than one percentage point year on year. Would you say efficiency improvements from this warehouse consolidation or however you would call it, would you say those efficiency improvements are a material part of this one percentage point improvement?
We still won't give you a number, you know? But obviously, it's included in our anticipations, but since we haven't seen the full effect of it, it's not like we're totally relying on that for our results to go through. But it is a significant impact on the manpower cost in Ängelholm.
Yeah, and sort of following on that discussion on manual labor, I know your adjusted personnel costs were actually slightly lower year on year despite continued growth. Could you talk about that observation a bit and perhaps also discuss what sort of staffing increase you need, if any, for the next, say, 20% top line growth?
Yeah. So we do get operational leverage on our cost. That is correct. And I think we're well equipped. And as we talked about when talking about longer term margin, we said that this is the time when we expect to get more productive. We work a lot with making manual processes less manual, also in the headquarters, and we expect to see efficiencies from that going forward. So we expect to see continued operational leverage.
And if I can add, as you know, Benjamin, we have a policy or a kind of vision of being one too few staff-wise. And we actually see that with the development of technology and AI, there's a lot of opportunities to grow without having to add staff. So I think that's a kind of a good opportunity going forward that we will be able to maintain a number of people and then just grow.
Perfect. Those were all my questions for now. Thank you very much.
Okay. Thank you.
Thank you.
The next question comes from Niklas Ekman from Carnegie. Please go ahead.
Thank you. Yes. First, I just want to come back to the full year guidance and just how confident you are, particularly about the margin. It looks like sales growth, at least the low end, should definitely be within reach, but margins, given on my estimates at least, we have a 4.8% margin now for the last 12 months. So quite a significant improvement. And you're facing very tough comparisons. You're talking about markdowns and lack of campaign buys. So just can you remind us, were there any drags on the Q4 margin last year that you won't have this year? Or what gives you the confidence of seeing clear margin expansion in Q4 year over year? That's my first question.
Yeah. Yeah. Niklas, the confidence, of course, comes from the we know that if we manage to reach our revenue numbers, we have operational leverage. So that in itself kind of gives a lot investments in our warehouse. Transfer cells also provides that. So that's why we are kind of in that respect, we're confident. But of course, I'm never confident going into Q4 or November, December because kind of it's such big months. So it's just like going into a football match. If you're not slightly nervous before you enter the match, you will probably lose. So we are committed, and there's nothing that indicates that we would not reach our midpoint numbers so far, but kind of there's so much that can happen during the two months that always will make you sweat a bit before you go into it.
But again, nothing indicates that we will not reach our numbers.
Okay. Very clear. Secondly, can you tell us a little bit about if there have been any changes in the overall market? I mean, I get the impression that last year, particularly in H2, one reason for your strong performance was that many of your peers were holding back. And now, for instance, we're seeing Zalando coming out with the results this morning. They have seen reversal back to sales growth, for instance, and improved profitability. Are you seeing peers being generally more aggressive again in the market? Or is the competitive environment, would you say, similar now to what it was a year ago?
I think it's very similar to what it was a year ago. I think statistics on this market are notoriously difficult to find, and kind of if we look at our numbers, we can see that our cohorts have been holding back, so meaning that consumers, they are kind of looking after the money. That has been compensated by a high number of new customers, so if anything, what we can see is that consumers, the ones that are in the market, they are going online, so actually, we are quite happy that our peers, both Zalando as well as ASOS, are kind of more confident, especially Zalando is growing because kind of we need some confidence in the market, and we think this is a proof that online is back in the game.
But also, what we've talked about basically at the IPO, we also see kind of the beginning of the consolidation in the market, meaning that smaller players are struggling. They can't invest or they might even go out of business while the bigger players are getting the operational leverage. So I think actually the current market conditions, they are not tougher than anything. So if anything, it's kind of consumer sentiment that is holding back. But in general, I think that we and the big players in general are gaining ground. So it's not because of increased competition.
Okay. Very clear. Thank you. And just a final question on Norway. Can you remind us how specific was this issue to Boozt? I seem to remember that you've said in the past that Zalando was in a similar situation, but are you seeing a same situation as you? And I guess they should also benefit from this verdict. But are you seeing other big players in the market that already were exempt from paying taxes, for instance?
I expect Zalando to send me a case of a beer, thanking for us to take the case because we know that they've been waiting in court to have their case. So I think it's Boozt and Zalando who have been the biggest players waiting, and the rest have actually been exempt from paying duties. So this has been a pending issue where kind of we and also Zalando have been waiting for the verdict. So yeah, so we have kind of had a disadvantage in the market for quite some time. Basically, I think it's like three or four years since the VOEC thing was implemented.
Very clear. Thank you. Thank you so much for taking my question.
Welcome, Nicholas.
The next question comes from Daniel Schmidt from Danske. Please go ahead.
Yes. Good morning, guys. A couple of questions from me and maybe finishing off with the Norway issue and the import duties that you will be relieved of. And you mentioned that Zalando and Boozt are the main ones that have been sort of forced to pay the import duties and others have not. How big of a market share do you think that you two have in Norway on the online clothing sort of segment?
I think Norway is one of our smaller markets. I would say that in general, it's lower than our average. I expect it to be quite fragmented. I would believe that Zalando is the biggest one. We're number second just as in the rest of Nordic, but how big it is exactly in Norway, I don't know. I think there are great opportunities to continue to grow. We haven't invested as much as we would have if we wouldn't have had this temporary issue.
Yeah. No, I think that it will, of course, open an opportunity for you to be more aggressive, like you've said, for some time. And that is actually now happening. But some of the saving will also likely disappear in market dynamics. And I think that's also what you're saying, basically, that not all of the 50 will drop down to EBIT, but part of it will go into different market dynamic. And given that Zalando is also benefiting from this, they will use that as well, I guess. But I guess it's hard to see how it's really going to play out, but you're very confident that it's going to be a saving at least.
Yes, Daniel. I'm not sure whether I understand what you mean by market dynamics. Until now, we have paid for the duties, and we have taken the investments, basically meaning that Norway has more or less not been profitable for us because we have been expecting either customs to go away, and then when the VOEC was implemented, that we would be kind of allowed to use that. It took us three years. And yes, we might invest more in marketing kind of to grow a customer base, but I don't see any reason why we should use it for more markdowns or cut costs because we're already competitive on the prices. We just have not made as much money as the local players.
Yeah. No, but I'm just speculating that Zalando might take that decision, and that would force you to take that decision as well to some degree, but we'll see.
Yeah, but they're business people like us. Why would they kind of continue to be loss-making? No, it wouldn't really make sense.
No, no. Okay. Sure. Sure. I don't have any sort of insight into their Norwegian numbers, of course, and maybe you do. Some others have said a little bit when it comes to the start of the autumn-winter season that it's been an early start instead of a good start. Do you agree with that, i.e., that you had better, sort of more favorable weather conditions in September than last September, but that you don't really buy two autumn jackets? You only buy one?
That was almost a philosophical question. Yeah. Obviously, September was a cold month and October was a warm month. So that would, of course, influence how fast and when people will buy into the autumn-winter collection. But again, as we said, there's nothing that indicates that we will not meet our kind of revenue targets. And so I think it's kind of very early to speculate that consumers spent or bought all their autumn-winter clothing in September. So I don't think that's the case.
Last year, we were surprised by how people were shopping during Black Friday in December. We don't see why it shouldn't have the same pattern this year. People have been very price-sensitive, but making sure that they buy what they want and what they need during this period. We need to make sure that we have inventory to support that. That's what we're prepared for.
Yeah. Thank you, guys. That's all from me.
Okay. Thanks, Daniel.
Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Okay. Thank you, guys, for some very good questions. And so this concludes our presentation. And I guess we will see you in the coming days. Thank you very much, and bye-bye.